Business & Finance
Student loan borrowers have until September 30 to secure temporary interest rate discount
Federal borrowers who enroll in autopay can receive a 1-percentage-point interest rate reduction lasting through June 2028.
The short version
- Federal student loan borrowers must enroll in autopay by September 30 to receive a temporary 1-percentage-point reduction in their interest rates.
- The temporary discount is designed to run through June 30, 2028, but borrowers who go into default, deferment, or forbearance will lose the benefit.
- The promotion coincides with a broader Department of Education repayment overhaul that has led to higher monthly bills and administrative errors from loan servicers.
Key facts
- The temporary 1-percentage-point interest rate reduction is available to borrowers of direct federal loans disbursed on or after July 1, 2012.[Business Insider]
- Borrowers already enrolled in autopay automatically receive the enhanced discount, which builds on the standard quarter-percentage-point reduction to reach a full 1 percentage point.[Business Insider]
- Department of Education Undersecretary Nicholas Kent stated the initiative is intended to increase repayment rates and support the health of the federal loan portfolio.[Business Insider]
- The interest rate incentive arrives alongside a Department of Education repayment overhaul that took effect July 1, which has resulted in administrative billing errors.[Business Insider]
Sources
- Student-loan borrowers have 1 month to enroll in a temporary repayment benefitBusiness Insider metered